A massage parlour in an upscale Richmond, B.C. hotel is one of two businesses being investigated in light of a CTV News hidden camera investigation into illicit sexual services.

Mounties and Richmond city inspectors are investigating the Water Club, which occupies two floors of the posh Radisson Hotel, and KK Acupuncture.

Authorities are already familiar with the Water Club, which was shut down for two months in March for bylaw violations. On one occasion, staff refused to allow police inside the club. On another, a naked female employee and a customer were found inside.

A CTV undercover volunteer visited the Water Club earlier this month after its license was reinstated. The manager, Paul, told the "customer" that 25 girls worked there and a full body massage was available.

"Everything, body massage… hand, body, hand release." Paul said.

"Hand release meaning masturbation? " he was asked.

"Yeah, yeah," he replied.

When CTV contacted the manager after the undercover visit, Paul denied that sexual services were being offered.

The business pays the Rasdisson about $20,000 per month in rent. The hotel's general manager, Kathryn Warren, told CTV the Radisson is "not aware of any illegal activity that has been proven to have taken place."

When CTV told her about what the results of the hidden camera investigation, Warren said the company's PR people would comment. CTV did not hear back by Thursday evening.

Richmond mayor Malcolm Brodie promised swift action.

"We will not condone it, we will not accept it," Brodie said, adding that the city has tried to keep a close eye on these body-rub parlours through more frequent inspections and more stringent by-laws.

Doors to the rooms are not allowed to have locks and female employees must wear non-transparent clothing from the neck to knees and sleeves must go to the elbows.

For politicians and police, targeting massage parlours has had mixed results.

Police arrested more than 100 people at 18 massage parlours across the Lower Mainland in 2006, believing the women could be victims of human trafficking -- but Insp. Tim Shields admitted the operation was not a success.

Among the few charges approved by Crown in the crack down, none were for trafficking.

CTV visited five different massage parlours in Metro Vancouver. At all the locations, workers offered sexual services.

One of the businesses, located on Kingsway, has a questionable past; Michael Ng used to run a massage parlour there, but in 2007 was convicted of smuggling women from China with promises of waitressing jobs only to force them into prostitution.

A different business is now at that location. When CTV went in, it appeared sex was for sale again.

The female worker said that full service was available. When asked if the girl does everything, including sex, she said yes.

City leaders acknowledge that illicit activity goes on in some of these businesses and the best they can do is to inspect and enforce the rules.

"I'm hard pressed to find an alternative, to be honest. I would like to snap my fingers and change people's conduct, we can't do that," said Richmond mayor Malcolm Brodie.

"If we just got rid of all of them, the risk is the same activity goes on underground – and you could have human trafficking sexual activity going on in a totally unregulated situation."